Solana Staking Market Analysis: Major Players in the Liquid Staking Field

Recently, the market has warmed up, and Solana (SOL) has risen to become the sixth largest cryptocurrency. Among all proof-of-stake (PoS) blockchains, its staked asset scale is second only to Ethereum. However, the capital aggregation level of decentralized finance (DeFi) applications within the Solana ecosystem is relatively low, with a total value locked (TVL) of $1.137 billion, only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play an important role and are key to driving the TVL back to its historical highs. Among them, Marinade and Jito occupy a significant position with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the important players in the liquid staking space on Solana and conduct a comparative analysis of their strategies and market performance.

Stake and Liquid Staking Overall Situation

As of December 12, the market capitalization of SOL is $30.53 billion, with a staked market value of $27.62 billion, a staking ratio of 69.18%, and a staked amount of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 6.87%. The staked market value of SOL ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among the PoS public chains with higher market capitalization.

There are a total of 1986 validators in Solana, with the top-ranked validators offering an APY close to 8%, and no commission required.

To reward SOL holders and enhance the network's security and censorship resistance, the Solana Foundation has launched the "staking pool program." Users can deposit SOL into the staking pool and receive SPL tokens that represent their share in the staking pool; these SPL tokens are liquid staking tokens (LST) and can circulate freely. Data shows that a total of 16.82 million SOL is locked in the staking pool, providing an average APY of 6.68%. The SOL in the staking pool accounts for about 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are the four largest liquid staking projects in the Solana ecosystem.

Marinade Finance

Marinade Finance is one of the earliest liquid staking protocols in the Solana ecosystem, launched on the Solana mainnet in August 2021. Staking SOL on Marinade will yield mSOL, and staking rewards are directly accumulated in mSOL.

Marinade also offers native staking services, allowing users to earn staking rewards without using any smart contracts (thus no LST).

Marinade has 7.058 million SOL staked, which is the most among liquid staking projects on Solana; it is also the project with the highest TVL on Solana, valued at $777 million; the staking yield is 6.543%; the amount staked has increased by 31.22% in the past 30 days.

The governance token of Marinade is MNDE, with a circulating market cap of $85.99 million and a total market cap of $356 million, having increased by 22.2% in the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. In Jito, staking SOL can yield JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Unlike other liquid staking projects, Jito has developed maximum extractable value (MEV) infrastructure for the Solana network. Due to its own MEV operations, a portion of the MEV earnings will be allocated to JisoSOL, so users staking through Jito also enjoy relatively higher returns.

There are 6.38 million SOL staked in Jito; the staking amount has increased by 17.77% in the past 30 days; the TVL is $455 million; the staking yield is 6.892%.

The governance token of Jito is JTO, with a circulating market cap of $342 million and a total market cap of $2.973 billion, having risen 46.6% over the past 7 days.

BlazeStake

BlazeStake was launched in May 2022 and has recently surged due to the collective explosion of the Solana ecosystem, with its governance token rising several times from its low point, surpassing Lido to become the third largest liquid staking project on Solana. By staking SOL in BlazeStake, users can receive bSOL, and the staking rewards are directly accumulated into bSOL.

BlazeStake primarily uses the official staking pool smart contract from Solana Labs, which has the largest set of validators, allowing users to liquid stake to specific validators.

BlazeStake has 1.52 million SOL staked; the staking amount has increased by 177% over the past 30 days; the TVL is 108 million USD; the staking yield is 6.232%.

The governance token of Blaze is BLZE, with a total market value of $38.84 million, having increased by 66.5% over the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but its development on other chains has not been ideal, failing to capitalize on first-mover and brand advantages, and it announced in October that it would stop accepting new stakes on Solana. By staking SOL in Lido, users can receive stSOL, and the staking rewards are also accumulated in stSOL.

Lido has 887,000 SOL staked; the staking volume has decreased by 41.43% in the past 30 days; the TVL on Solana is $63.4 million; the staking yield is 6.717%.

Lido's governance token is LDO, with a circulating market cap of $2.095 billion, a total market cap of $2.356 billion, and a 6.7% decline over the past 7 days.

Applications of Various LSTs in DeFi

Marinade's mSOL, Jito's JitoSOL, Blaze's bSOL, and Lido's stSOL have all received good support in Solana's DeFi applications.

The two largest lending protocols on Solana support mSOL, JitoSOL, bSOL, and stSOL as collateral for lending, but stSOL has been delisted by both projects following Lido's announcement.

On the largest DEX on Solana, both mSOL/SOL and bSOL/SOL have over ten million dollars in Liquidity, and there are also trading pairs for direct trading between mSOL and bSOL; while the Liquidity for Jito/SOL and stSOL/SOL is relatively low.

The increase in staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, with an APR of 15.37% BLZE governance token subsidy for deposits on a certain lending platform, and an APR of 1.98% MNDE governance token subsidy for mSOL deposits. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, while Lido's tokens have been almost fully distributed and are unable to provide further incentives, choosing to exit the market.

Summary

The Solana ecosystem includes various representative liquid staking solutions, all supported by DeFi projects within the ecosystem. Marinade was the first to launch and offers native staking services; Jito provides higher yields through MEV infrastructure; BlazeStake allows users to stake SOL to specific validators; Lido represents a provider of multi-chain liquidity staking services. However, the total amount of liquid staking is relatively small, with SOL staked through staking pools accounting for only 4.3% of all staked SOL. The abundance of liquidity solutions has also led to the dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to be crucial for the increase in staking volume and the liquidity of LST in DEXs. The Blaze project has the least recognition but has offered the highest APR subsidies in DEX and lending protocols, with staking volume increasing by 177% over the past 30 days. Lido, despite having the most recognition in the field of liquid staking and launching on Solana earlier, has almost fully distributed its tokens and is unable to participate in the subsidy battle, leading to its decision to shut down.